from the new-model-experiments dept

At this point, bands releasing stems and asking fans to remix their work is old hat. We've seen it done a bunch over the years, and it's pretty common. But Darren Hemmings alerts us to a cool variation on that done by the UK band Chapel Club. Earlier this year, Chapel Club "parted ways" with Universal Music. In testing out new things, it decided to do a remix offering, but one where fans are actually encouraged to then try to sell the results and make money off of it:

We're offering THE WHOLE WORLD the chance not only to REMIX THE TRACK, but to SELL their creations and KEEP THE MONEY. LOL.

So the deal is this: you can download these stems FOR FREE, remix the song and self-release it digitally via any online outlet you like. To find out how best to do this we've attached a little step-by-step guide, below.

The band does admit that they're about to sign a new record deal -- so they're doing this "in between" deals, and it's unclear how long it will last. Also, the terms and conditions (pdf) are interesting in that they actually provide detailed instructions on how to upload the remixed tracks to Tunecore and CDBaby. The band does ask that you email them before releasing the track, which seems like a reasonable request. What's a little odd, though, is that they will not allow remixers to "give away" the remixes:

So the deal is this: you can download these stems FOR FREE, remix the song and
self-release it digitally (and only digitally) via any online outlet you like (as long as it’s
known for selling lots of music). You can also stream your creation (but don’t give it
away).

That seems like a silly and pointless restriction. The band does note that it retains the publishing rights, meaning that if someone does remix the song and sells a ton of copies somewhere, they'll still get their publishing cut (though the remixer will get all of the direct sales revenue, minus the fees taken out by the middlemen). So, it's smart in that the band knows that if someone else somehow figures out a great way to market and sell the song, they'll still make some money. But, it's still a little disappointing to see that restriction on giving it away. For such an experiment that seems pointless.

It's also a nice reminder that letting some others make money in helping to promote your work (or even letting them build on your work) can be a good thing. There's way too much of an attitude among some that every penny that's earned belongs to the original creator, even if someone else did more with it. We've warned before that non-commercial restrictions on Creative Commons often don't make sense -- but many people cling to them out of this irrational fear that if someone else makes money, it means you lose money. So it's great to see the band recognize that a bigger pie can be good for all.

That said, while I do think this experiment is cool -- and I love to see bands experiment in unique and innovative ways -- I do wonder how successful experiments like this will be. I think that many people think that fans will rush out to try to "make money" with content from an artist they like, but in watching various businesses built around that concept before, I just haven't seen it play out in reality. Fans like bands because they like those musicians and want to support them. Assuming that they have a monetary incentive to help out often feels weird and just doesn't interest people. In fact, it reminds me a lot of Daniel Pink's awesome and thought provoking book Drive in which he notes a large stack of research that says for some activities (not all!) providing monetary incentives actually harms output. It's for activities where the person already feels fulfilled in some manner or another, and I'd argue that probably applies with fans. Fans don't want to make money off artists they love. They just want to see them succeed. Adding the monetary component might not necessarily be a very good incentive, even if people assume that money is always a driving incentive.

Still, that's just an aside on money and incentives. I still think it's cool to see a band experiment with something different to engage fans that could possibly open up another new revenue stream.

from the the-industry's-'get-broke-quick'-scheme dept

We've covered a number of stories dealing with ebooks and their disruption of normal publishing. There have been a lot of growing pains in the industry as the ebook market continues to expand, replacing physical sales (and their associated margins and intentional bottlenecks) and knocking down a healthy number of barriers to entry.

Allegations of ebook price fixing are still in the air, pending the Department of Justice's investigation. No matter the final decision, publishers will still be free to set ebook prices as high or low as they want to. But if they insist on pricing themselves out of the market, they'll be seeing an increasing number of their authors decide to write their own tickets, as others have done with great success.

Mark Coker, founder of Smashwords, breaks down exactly how traditional publishing houses are shooting their own authors in the foot with pricing "strategies" that run in direct opposition to how people purchase ebooks. With ebooks expected to compose nearly 30% of trade book sales (in total dollars) in 2012, authors may be doing serious damage to their careers by selling their ebooks through traditional publishers.

One surprise, however, was that we found $2.99 books, on average, netted the authors more earnings (profit per unit, multiplied by units sold) than books priced at $6.99 and above. When we look at the $2.99 price point compared to $9.99, $2.99 earns the author slightly more, yet gains the author about four times as many readers. $2.99 ebooks earned the authors six times as many readers than books priced over $10.

If an author can earn the same or greater income selling lower cost books, yet reach significantly more readers, then, drum roll please, it means the authors who are selling higher priced books through traditional publishers are at an extreme disadvantage to indie authors in terms of long term platform building. The lower-priced books are building author brand faster. Never mind that an indie author earns more per $2.99 unit sold ($1.80-$2.10) than a traditionally published author earns at $9.99 ($1.25-$1.75).

This isn't news to anyone following along here at Techdirt. For some reason, though, many traditional publishers still feel that higher prices equal higher profits and fail to see that lowering prices will increase their sales and profits over and above what they can expect at their normal price points.

Certain members of the traditional publishing crowd argue that lower prices are unsustainable given built-in costs and that pursuing these price points will somehow "devalue" the written word. First of all, selling your product for more than the public is willing to pay is what's actually "unsustainable." And any explanations involving fixed costs will fall on deaf ears because consumers don't make purchases based on what they think the product is worth to the company selling it. They purchase based on what they feel the product is worth to them.

Secondly, if people aren't buying at $9.99 but they are at $2.99, then the product isn't "devalued." If you're selling many more units at a lower price, then your price point is closer to "dead on" than "undervalued."

The picture painted augurs well for indie ebook authors, but indicates that authors who continue to publish with traditional publishers might actually be damaging their careers. Look no further than the bestseller lists at Apple, Amazon or Barnes & Noble to see that indie ebook authors are taking eyeballs from the authors of NY publishers. As I write this, seven of the top 30 bestsellers in the Apple iBookstore are distributed there by Smashwords.

In the short term, existing publishers would do well to follow Coker's advice and start maximizing sales by lowering prices. Most publishing houses have already had the term "price fixing" pointed at them, and thinking that you can somehow outlast the consumers in a price war is just going to shove you to non-existence that much faster. Exclusive deals with authors won't mean much when no one's buying, and those authors are going to swiftly tire of minimal sales and miniscule royalties, especially when they can plainly see better opportunities outside the gates.

from the success-stories dept

We've written a lot about the incredible new ecosystem of independent, self-published ebooks, which in a few short years (with the help of huge success stories like Amanda Hocking and Joe Konrath) has largely eliminated the stigma of what we once called "vanity publishing", to the point that even traditionally published authors are deciding to go it alone.

Kindle Direct Publishing has quickly taken on astonishing scale – more than a thousand KDP authors now each sell more than a thousand copies a month, some have already reached hundreds of thousands of sales, and two have already joined the Kindle Million Club.

Under the old system, many of these authors would likely still be sending out manuscripts, hoping for the lucky convergence of circumstances that puts it in the right pile in front of the right reader when they're in the right mood. There's still some disdain for self-publishing in some circles—but with the open playing field that has been created, the increasing number of authors flocking to it, and a growing roster of success stories, it won't be long before that too starts to change.

from the take-the-money-and-run-(your-own-business) dept

Uber-successful blogger Penelope Trunk took the long route to self-publishing, beginning as a blogger before being picked up by an unnamed major publisher before making the decision to self-publish (and cashing a large advance check along the way). As more and more authors have discovered, the advantages of self-publishing (control of their work; more profit) are increasingly outweighing the disadvantages (handling your own promotion; sourcing your own editing, etc.).

So I sold my book to a mainstream publisher and they sucked. I am going to go into extreme detail about how much they sucked, so I'm not going to tell you the name of the publisher because I got a lot of money from them. I'm just going to tell you that the mainstream publisher is huge, and if you have any respect left for print publishing, you respect this publisher. But you will not at the end of this post.

Now, we've all heard how major publishers can be annoying to deal with. Between pushing back release dates, locking up parts of writers' catalogues, lacing e-books with DRM and other such dickery, major publishers have earned just about as much respect (around these parts, anyway) as the major labels and major studios. While many authors have become successful within the system, the evidence points to the sad fact that the "system" is sorely in need of drastic change. Sadder still is the fact that there seems to be no rush to meet that need.

Trunk's experience with the major publisher didn't take a turn for the worse until the discussion of promotion began. What follows are some of the most unintentionally hilarious "promotion" ideas I've ever heard bandied about by people specifically tasked with the job of promotion:

To be clear, I wrote my book, and they paid me my advance, in full. Three months before the publication date, the PR department called me up to "coordinate our efforts." But really, their call was just about giving me a list of what I was going to do to publicize the book. I asked them what they were going to do. They had no idea. Seriously.

Well, that's just terrible. A PR department, whose very existence is predicated on public relations, drawing a blank when asked directly what they, as employees of the power major publisher, were going to do. And then, they had "ideas" -- the kind of ideas that are fully deserving of the quotation marks around the word:

They did not have a written plan, or any list, and when I pushed one of the people on this first call to give me examples of what the publishers would do to promote my book, she said "newsgroups."

I assumed I was misunderstanding. I said, "You mean like newsgroups from the early 90s? Those newsgroups? USENET?"

"Yes."

"Who is part of newsgroups anymore?"

"We actually have really good lists because we have been working with them for so long."

"People in newsgroups buy books? You are marketing my book through newsgroups?"

There's nothing like holding a conversation in 2012 with someone who still thinks it's two decades earlier, especially if this is the first idea that comes to mind with all the other social media options available. Maybe if Trunk's book was targeted towards the interests of newsgroups or had sprung from there, this might make sense. (And it might even give the PR team a bit of street cred, if they did still hold some sort of grassroots power in 20-year old newsgroups.) But this sounds more like a case of blowing the dust off the floppy and running a copy of "The List" off on the nearest dot matrix, rather than a savvy move based on years of carefully cultivating an online following.

There's more:

At the next phone call, I asked again about how they were going to publicize my book. I told them that I'm happy to do it on my blog, but I already know I can sell tons of books by writing about my book on my blog. So they need to tell me how they are going to sell tons of books.

"LinkedIn."

"What? Where are you selling books on LinkedIn?"

"One of the things we do is build buzz on our fan page."

I went ballistic. There is no publishing industry fan page that is good enough to sell books. No one goes to fan pages for publishers because publishers are not household brand names. The authors are. That's how publishing works.

Something that the major publishers seem to have in common with other artistic venues saddled with the word "major" is the fact that these entities tend to greatly overvalue their brand and undervalue the artists signed to it. Major studios still seem to believe that people give a single damn what studio produced their favorite movie, failing to realize that people are drawn to movies for the actors, directors, writers, stories, explosions, etc. -- anything but the studio itself. No one not employed by the studios themselves walks around talking up the latest "Sony Pictures Studio" film. The same goes for the recording industry. While certain labels have gained (and sometimes lost) cachet over the years based on their stable of artists, it's still about the artists. People may love Sub Pop, but if Sub Pop began cranking out albums by just anybody, it would swiftly lose its respectability. Obviously, the same goes for major publishers, who somehow believe that readers care whether it's Random House or Harper-Collins that just put out a book by their favorite author.

Oh. Yeah. There's more. Trunk was asked to meet one more time with the publicity team. This culminated in a long Powerpoint presentation where Trunk learned all she wanted to know about major publishers -- none of it good. Here's what she learned:

Print publishers have no idea who is buying their books.

Amazon knows their customers. Publishers don't. Amazon won't give them the information and what little the publishers can draw together demographically comes from brick-and-mortar sales. This is a handicap, to be sure, but the publisher Trunk dealt with compounded this problem by performing impossible mathematics:

When I pointed this out to my publisher, they told me that for my book, they expected to sell more than 50% of the books in independent bookstores. And then they showed me slides on how they market to people offline. They did not realize that I ran an independent bookstore while I was growing up. It was the family business. I ran numbers for them to show them that if they sold 50% of the sales they estimated for my book, they would single-handedly change the metrics of independent booksellers. That's how preposterous their estimates were.

Print publishers have no idea how to market online.

Without access to online data or the interest in using what they do have, publishers fly blind, relying on what used to work to continue working, including such Pleistocene-era tactics as "TV spots and back-of-book blurbs." They also seem blasé about actually connecting with their readers, something that is proven to leave you on the outside in a digital, connected world.

Print publishers have been too arrogant to learn how to run a grassroots, metrics-based publicity campaign online. They cannot tell which of their online efforts works and which doesn't because they can't track sales. They don't know how many people they reach.

The profit margins in mainstream publishing are so low they are almost nonexistent.

This remains a problem when your flagship product is a physical item with limited distribution points and the associated costs of printing, distributing, warehousing, remainders, etc. Digital products carry none of these costs, allowing authors (and publishers) to make more per book even at a fraction of the price. How bad are the margins? Consider this factoid:

The most breathtaking example, I think, of how terrible margins are, is that if I sell my own book with a link to my publisher, I make a little less than $1 per book. If I sell Guy Kawasaki's book on Amazon, I get a little more than $1 per book in their affiliate program. So it's more profitable to me to use my blog to sell someone else's book than to sell the book I published with a mainstream publisher.

No matter how much you might believe in the power of a major publisher, it's got to knock a little wind out of your sails to realize that authors can make more selling other people's books through the much-hated Amazon. Whatever power remains in old school publishing is swiftly being undercut by their inability to move forward at the pace of their market.

This whole debacle culminated with the PR peacemaker threatening to dump Trunk's book if she didn't play nice with the clueless promotional team. So much for calling her bluff.

I said, "Great. Because I think you are incompetent. And also, you have already paid me. It's a great deal for me."

Trunk went off, did six months of research on the ebook industry, and took her book to Hyperink, an independent publisher which specializes in helping bloggers convert their blogging into books. Click through for her whole post, which contains some more devastating insights into the publishing industry as well as a rundown on the "New Rules of Book Publishing."

from the moving-with-the-times dept

Publishers find themselves confronted by a difficult dilemma at the moment. On the one hand, they might want e-books to succeed, because digital devices represent a huge new market to which they can sell their back catalogs. On the other, they might want them to fail, because e-books will cannibalize sales of traditional books, and it's not yet clear how low the price of e-books will have to go in order to avoid the kind of piracy problems the recording industry exacerbated through persistent overcharging.

But maybe publishers can have it both ways – selling high-volume, low-price e-books, and small-run, high-price physical books. As a recent feature in the Guardian devoted to the rebirth of "beautiful books" put it:

What the rise of electronic publishing has done, rather, is create a context in which the book's two distinct incarnations – as beautiful object and as a set of vaporous pixels - are linked not by "or" but "and".

This is certainly what they believe at the Folio Society. You might think that a company that has dedicated itself since 1947 to publishing exquisite editions of classic texts – everything from Beowulf to Elizabeth David's Italian Food – would be feeling glum about its chances in this new landscape. But David Hayden, the publishing director and a bookselling veteran, is feeling perky. An unabashed fan of new technology, he reckons the result of the seismic shifts in publishing will mean "fewer and better-produced books". In particular he believes in the model of the "retroactive purchase", which goes something like this. You buy an e-reader and, at a stroke, have access to thousands of out-of-print classics via Project Gutenberg. One evening, at a loose end, you download The Mill on the Floss, having always wondered vaguely what it was about. You find yourself transfixed. You love this book, you really do, and want to suggest it to your book group. So you buy the Penguin Classic edition, because it's easy to scribble on and pass around. And then, when your Mum's birthday comes around – she loves George Eliot and has been on at you for ages to take the plunge – you give her a handsome presentation copy of the book, bound in buckram and silk, the sort of thing that the Folio Society does surpassingly well.

The rise of beautiful books described in the article is a classic example of using abundance to make money from scarcity. Freely-available e-books encourage people to read a text they might not have encountered otherwise. When they discover they enjoy it, they decide to buy it in a form that enhances the pleasure of reading – a high-quality physical book.

This phenomenon is why publishers should not see low e-book prices – which are likely to come, whether they want it or not, not least because of Amazon's growing power – as the end of the world. In the digital age, where raw information can and will be copied freely, it no longer makes sense to pursue a business model based largely on selling what's inside the book. Instead, publishers should think about the unique elements of the content's packaging, which can't be shared in this way. That's exactly what companies built around open source have done, and Red Hat is now a billion-dollar business.

from the catch-up-with-the-times dept

A few folks have sent over this great interview with Mark Cuban discussing the fact that he has a best selling book on his hands, one that was put together quickly, mostly from old blog posts, sold as a $2.99 ebook online, with Mark handling most of the promotion himself. There are a bunch of things in the interview, but what comes across loud and clear is just how obsolete the old way of publishing is these days. In an era where it still takes years for books to come out, and almost a year between an author handing in their final version and publication, Cuban tells a very different story:

Of all your business ventures, the profit margin for this book is unmatched. Much of the book already had appeared as blog posts, and the production, promotion and distribution costs were negligible ...

Yes. That is what made this approach so appealing. I didn't have to spend a ton of time writing and editing, and Scott Waxman at Diversion Books was very accommodating in allowing me to make edits, literally up to hours before the book was released.

More importantly, I didn't have to commit to doing a book tour and a rigorous interview schedule because I controlled all the economics. I try to always be a good business partner. If a publisher had made a big investment in me, I would have felt immensely obligated to make sure they made money.

Instead, I can work to my schedule and work almost exclusively from my phone and laptop to do all the promotional work.

Before anyone says anything, we're certainly not saying that just anyone can do what Mark did. Given his fame, success, reputation and following, all of that played into the level of success here. And he's willing to admit that. But that doesn't mean that there aren't key lessons here for the publishing industry. The idea of being able to produce smaller books, much more quickly is really quite appealing. And the legacy publishers still just aren't getting it.

from the surely-worth-trying dept

Increasingly, publishers are joining the music and film industries in bemoaning the effects of piracy on the sales of digital products – and some are even starting to sue people for alleged copyright infringement (because that has worked so well elsewhere.) Perhaps they should take a look at what is happening in China: instead of whining about e-book sales "lost" to piracy, publishers there have come up with a business model that embraces the possibilities of the Internet:

Here in China, nearly 195 million people are hooked on a kind of literature that is virtually unknown in the West, but that is rapidly transforming its authors and a new breed of online media companies into the publishing stars of the future. Web literature or “original fiction” as it’s called in China is a new form of serial literature which theoretically allows anyone to become a best-selling author.

The system works through a growing number of self-publishing websites that host thousands of constantly evolving, free-to-read stories posted on the sites by their authors. These websites are incredibly popular with consumers, attracting over 40% of all China’s internet users every month, who come to read web serials that can be anything from realistic novels to historical epics, comics, sci-fi and fantasy.

The ingenious part of this publishing model comes in when an individual author’s serial gathers a critical mass of readers. At this point the self-publishing site invites the author to become a VIP, and their serial moves to a different section of the site where readers can sample some chapters of their work for free, but have to pay if they want to read the latest installments.

That may just sound like a typical bait-and-switch paywall approach - get them hooked then get them to pay - but there are a couple of things of note here. First, the speed at which new content is added: in a comment to the article quoted above, the publisher Lisa Zhang speaks of how "daily updating of the works on our platforms helps to build a close writer-reader relationship." Secondly, the extremely low paywall charges are designed to minimize any reader's urge to hunt out pirated versions of "VIP" content - prices are "around 2-3 Yuan (about 20p or 30 cents) per 100,000 words" according to the article.

Scale is clearly important here, and one of the big advantages that Chinese publishers have over those operating in most other countries. And that applies to the writing side as well as to the sales. In her comment Zhang writes: "by the end of June 2011, 1.4 million writers have been writing on our platforms. They have created 5.4 million titles."

Still, it's great to see publishers moving on from tired arguments about piracy, and spending their money not on lobbying for new laws to defend old monopolies, but on investments in new business models that have led to a huge upsurge in creativity – and profits. Maybe it's time the US started copying China for a change.

from the cold dept

We've discussed a lot lately how we've reached the point at which many authors have realized that self-publishing is a better deal than going with a big publisher. This is leading some to turn down huge advances from publishers to go it alone. And some are now asking if it makes any sense for authors to bother with publishing deals any more.

As with record labels, I've always thought that there are a variety of factors at play here, and for some authors, it can absolutely make sense to sign a publishing deal -- though I would be very careful to understand what's in the deal. For example, I've noted that for an author that isn't that well known, it's possible that doing a deal with a publisher can help with the marketing and getting the book in the right hands. Of course, some recent authors have pushed back on this, noting that publishers often expect authors to do much of their own marketing anyway... and that the marketing that they do contribute often is a total waste.

Indeed, it appears that some more authors are agreeing with that. Novelist Polly Courtney, who had successfully self-published a couple of books a few years back, leveraged that success into a three book contract with HarperCollins. However, now she's made the news because at the launch party for the third book... she announced that she's dropping HarperCollins and going back to self-publishing. Part of the problem? The "marketing" that HarperCollins provided. In her mind, they tried to pigeonhole her book in a category where it didn't belong.

"My writing has been shoehorned into a place that's not right for it," she said this morning. "It is commercial fiction, it is not literary, but the real issue I have is that it has been completely defined as women's fiction … Yes it is page turning, no it's not War and Peace. But it shouldn't be portrayed as chick lit."

[....]

"I'm not averse to the term chick lit," said Courtney, "but I don't think that's what my book is. The implication with chick lit is that it's about a girl wanting to meet the man of her dreams. [My books] are about social issues – this time about a woman in a lads' mag environment and the impact of media on society, and feminism."

Apparently, the issue of the covers has been going on for all three books, so she's dropping HarperCollins at the first opportunity -- and doing so in quite a public manner. The final straw was apparently the positioning on this final book.

The jacket, which displays the chick-lit staple of a pair of slender legs, misrepresents the novel, Courtney believes. "The titles and covers have been a problem with all three of my HarperCollins books, right from the start," she said. "If I had my time again I certainly wouldn't have signed with them. There's a feeling that any author should be grateful for any attention they can get from any publisher – that they should take what they can get. But I don't think they should have looked to sign me on the basis of what I'd written so far."

Her decision to publicly ditch her publisher was the result of "three years of pent–up frustration", she said. "People are looking at my books and saying 'you've turned chick lit'," she said. "The irony is that what's inside the books hasn't changed. To give Avon their due, in terms of the editorial process they didn't try to change what's inside into something different. It's the packaging. From the reader's perspective, they'll see it on the shelf and think this is chick lit, and it's not."

What this highlights is that some of the benefit of a big publisher might also be its biggest weakness. And that's scale. Book publishers can do scale well, but in order to handle scale, they try to run things through the same formula. You classify and then you follow the playbook. But that keeps you away from doing anything really creative, and creates problems when a book doesn't necessarily fall into a pre-defined area. I think if publishers are really going to serve authors usefully going forward, they're going to have to become a lot more flexible, and a lot less about marketing-by-the-numbers.